The World Bank has committed $8.5 billion to Nigeria to fund critical issues ranging from agriculture to education.
Revealing this Thursday in Abuja at a summit hosted by the Emergency Coordination Centre, the World Bank’s Country Director in Nigeria, Shubham Chaudhuri, noted that the amount was the highest of any country.
He noted that it was still infinitesimal compared to Nigeria’s needs, however, pointing out that around $2.5 billion to $3 billion of the fund had been channeled into education.
“Half the population of Nigeria is under the age of 17. This means investing in human capital development is necessary,” he said.
He noted that the future of Nigeria hinged on the ability of young people to go to school, stressing the importance of making schools safe to ensure that fewer children are out of school.
He further said that it was Nigeria’s call to determine how it would mobilize its financial resources to enable young Nigerians to go to school or whether its scarce resources would be used to subsidize gasoline with more than 6 .5 trillion naira.
Africa’s most populous nation is mobilizing 6.7 trillion naira for petrol subsidies at the expense of education and health. Around 10.1 million children are out of school, according to the Department of Education, but a report suggests there are as many as 18.5 million.
Analysts have described Nigeria’s insistence on subsidies as financial indiscipline, noting that it would have adverse consequences for the Nigerian economy.
For Professor Jonathan Aremu, former deputy director of CBN and senior lecturer at Covenant University, subsidies have distorted the market, preventing products from finding their real value.
“In economics, subsidies are always bad. Yes, a lot of people are dependent on fuel, that’s why they have continued to subsidize gasoline, but we don’t know how much is actually spent on subsidies.
He explained that the next government should not only remove subsidies but also provide incentives that would alleviate the suffering of Nigerians.
Professor of energy economics at Nnamdi Azikiwe University, Uche Nwogwugwu, said removing subsidies would be a step in the right direction.
However, he said removing petrol subsidies for the time being would cause untold hardship and social unrest for Nigerians, suggesting an alternative path Nigeria could take.
“It is absolutely true that the burden weighs and will continue to weigh on the economy. A few soft facts are there to help save the country.
“The PIA has made NNPC a limited liability company that can seek profits. This is a good basis for solving the subsidy. It is recognized that the nation has subsidized consumption and now wants to channel into production. Expanding the market to include neighboring Cameroon, Ghana, Niger, Mali and Sudan where it is sold for around the equivalent of N300-400 per liter will recoup all funds and also generate benefits.
“It will also completely eliminate the activities of smugglers. Under the Africa Free Trade Charter, the NNPC can sell to neighboring countries while giving the nation a breather to resolve domestic imbalances,” he suggested, noting that this could allow the country to solve the subsidy imbroglio.